Cutting Data Center Costs by 12.5% Will Require Innovation, Not Just Consolidation

In 2011, the federal government announced that it would cut spending on data center infrastructure by $3 billion, citing massive consolidation as one of the primary ways it would achieve those cost reductions.[1]

But is consolidation the only, or even the most effective, way to reduce data center costs?

Certainly, there are situations where consolidating data centers is a sensible way to maximize efficiency and reduce costs. But not always. Navy CIO Terry Halverson offered the example that sometimes putting a data center module right next to the user is the most cost-effective solution. In a technology briefing to government and industry executives, Halverson pointedly suggested that people “Stop worrying about the number of data centers.”

Indeed, if the goal is to reduce the cost of data center infrastructure in the U.S., the focus should be on efficiency and value, not just consolidation.

“To put that another way, data center consolidation is a step in the direction of government efficiency, but it’s not the only way to get there and consolidation itself isn’t the endgame,” writes Oracle’s John Foley in Forbes. “The real objective is to provide better government services, more efficiently and more securely, and to reinvest savings into innovation and continuous improvement.”

It’s a point that Bob Butler, IO’s Chief Security Officer, makes in a whitepaper titled Purpose-Built Modular Data Centers:

“These types of significant cost reductions cannot be achieved through facility consolidation alone; energy costs and overall data center technologies must be considered as well…The solution lies in more energy-efficient design, deployment and management of data center infrastructure.”

4 Sources of Data Center 2.0 Cost Savings

So for CFOs looking to reduce the cost of data center facilities and operations, consolidation alone won’t get you there. But Data Center 2.0 – the factory built, modular, software-defined data center – will. Cost savings associated with Data Center 2.0 (compared to the traditional data center) come from four sources:

1.      Just-in-time deployment – IO.Anywhere® is built in a factory according to standardized processes, so it can be deployed in as little as 120 days. Now you don’t have to overbuild today for capacity that the enterprise may not ever actually need.

2.      Hot-swappable, in-place upgradeable components – IO.Anywhere components can be switched out and upgraded in place, without massive disruption to data center operations. That means less costly maintenance and upgrades and a longer useful life for your data center infrastructure.

3.      Intelligent Control® real-time monitoring and notification – IO.OS®  is a state-of-the-art data center operating system that monitors all critical data center infrastructure, automatically optimizing performance.

4.      Energy savings – IO.Anywhere is designed and proven to be more energy efficient than the traditional data center. That’s in part because power and cooling infrastructure is optimized to operate at high-efficiency even at low utilization. And it’s in part due to Intelligent Control that enables enterprises to make smarter energy decisions based on real-time data.

So cost savings may be generated through data center consolidation, but costs must also bereduced through quality, innovation, and greater control over data center operations. Cutting $3 billion of $24 billion in data center infrastructure costs (a savings of 12.5%) is an ambitious goal, especially as demand is growing by about 50% per year.[2]

The only way the government – or any other organization looking to minimize data center costs – will achieve that goal is with Data Center 2.0.


[1] CIO.gov, Shutting Down Duplicative Data Centers, 20 Jul 2011.

[2] IDC, The Digital Universe in 2020: Big Data, Bigger Digital Shadows, and Biggest Growth in the Far East, December 2012.